No Such Thing as a Simple Will

For most people the task of accounting for all that they own and deciding how and to whom such assets are to be transferred upon their deceasing is a daunting task. That said, once the task is actually undertaken, most people spend considerable time and exercise great care in arriving at decisions regarding the disposition of their estate. When it comes to formalizing the estate plan, however, there is a tendency amongst people to seek out the simple Will and usually in an attempt to avoid the perceived expense associated with devising a proper estate plan with one’s solicitor, accountant, and financial advisor. For those subscribing to this notion, there are two truths which must be affirmed at the outset. First, there is no such thing as a simple Will and second, the estate planning process is relatively inexpensive and worth undertaking with the assistance of professionals.The Dangers of Seeking a Simple Will

The old adage “be careful of what you wish for” seems particularly appropriate. Consider that, despite the above decree that simple Wills do not exist, sometimes people who seek one out hard enough get just what they have asked for. Typically, this occurs when people either insist on a substandard product from the drafting solicitor or they attend to preparing their own Last Will and Testament with the assistance of a “Do It Yourself Will Kit”.

As an aside, solicitors should take great care when acting for clients unwilling to sit through a proper and thorough Will intake session in order to avoid future potential liability.

The fact remains that some solicitors prepare cookie cutter estate documents which do not address the specific needs of their clients. This practice often culminates in a Will which vests the entirety of a deceased’s estate in an executor and which accordingly affords no care in ensuring that effective tax saving measures are employed so as to preserve to the beneficiaries the most value out of the estate possible.

People are also frequently found to have:

• Assets allowing for beneficiary designations which, however, have not been set out; and
• Wills that fail to provide for the necessary terminology in order to ensure that such assets do not form part of the residue of estate and consequently made subject to Estate Administration Tax.

For those of such people which have since deceased, there is nothing that can be done in order to rectify this unfortunate state of affairs. For those still alive and willing to consult with competent counsel, much can be done in an attempt to take advantage of tax saving and estate preserving mediums. What is more, this author has, on a few occasions, been asked to assist in the administration of an estate, the testators for which, in the process of using a Will kit, failed to have their Wills witnessed. The results of such errors are, generally speaking, irreversible.

Another great myth believed by many Ontarians is that their estate is relatively small and not very valuable. Nothing could be further from the truth. Consider, for example, an owner of a home in the greater Toronto area who owns nothing else except for a used vehicle and the existing contents and furnishings in the home itself. Consider further that the average price of a house in the GTA is approximately $370,000.00. Even assuming that the existing value of the home with all its contents is just $370,000.00 and assuming further that the testator survives but another five years from the date on which his final Will is executed and properly witnessed, the value of this estate may prove to be quite valuable. In particular, and subject to any existing encumbrances against the home, the value of this estate, absent any further acquisitions of valuable assets, would be approximately $481,000.00 (based on the average annual appreciation of 6% to homes in the GTA). Furthermore, the current Estate Tax payable on a $481,000.00 estate would be $6,715.00. Many people in this home owner’s situation would also be happy to learn that, depending on a number of factors, opportunities also exist whereby a change to registered Title may also eliminate the Estate Tax otherwise payable.

The Inexpensive Exercise of Estate Planning

As discussed, many people overstate the cost associated with meeting with their lawyer, accountant, and financial planner. These all important and necessary encounters will be addressed in reverse order.

Beginning with the financial planner, most people attend one of the big Chartered banks and sit down with an RSP, Mutual Funds, or other investment advisor. As anyone who has gone through this exercise on at least one occasion will tell you there is no cost associated with obtaining the advice of such bank representatives. Your business is what these institutions are after, i.e., your investment portfolio. In other words, you are not paying hourly, for example, for the services rendered by the investment advisor.

Moving on to the accountant, consider first off that each and every one of us is required to file a personal income tax return once a year. With the exception of the minority who prepare and file their own returns, the vast majority meet with their accountant at least the one time each year and therefore have a perfect opportunity to assess and set out right then and there the assets and corresponding values forming part of their estate. This would presumably be achieved without adding to the cost already incurred as a result of having one’s return prepared.

Finally, with the exception of the particularly large and complex estate, the meeting with the lawyer is all part and parcel the estate planning process for which the cost associated with the same is merely the cost of having the Will itself and possibly a few other estate planning documents prepared. Lawyers are required to base the estate documents they draft on detailed information obtained from the client, otherwise known as the Will or estate planning intake process. Without this meeting no information can be obtained and without information, a proper Will cannot be prepared. Therefore, the price of the Will, Trust Declaration, Powers of Attorney etc., as the case may require, is the only cost to the client! Prices may furthermore be shopped by a simple phone call to law offices willing to quote such prices by phone. Should you consider doing so, you are invited to make our office one of your calls.